I smell a rat in last-minute deals
Prudence and honesty demand that contractual decisions that might end up tying the hands of the next administration with hurriedly and opaquely contracted deals, which the incoming regime might be forced to cancel later, should all be put in the deep freezer.
When a new regime is forced by political expediency to unilaterally cancel hurriedly or poorly negotiated contracts by their predecessors, it’s the taxpayer who picks up the tab for breach of contract.
I’m compelled to repeat myself on this subject matter after coming across recent letters and minutes of meetings of a committee co-ordinated from the Office of the President by the long-named Multi-Agency Technical Working Group on the Proposed Integrated Product Marking and Authentication System.
The committee’s work is pertinent to the subject I’m discussing. What is proposed has major implications on procurement of one of the most controversial contracts in the public sector—multi-billion-shilling tenders for printing of revenue stamps and product authorisation markers by Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (Kebs).
Haven’t you wondered why procurement of the printing of tax stamps, banknotes or pre-shipment inspection services are always marred by controversy and corruption allegations? Indeed, KRA’s contract for excise stamps and the track-and-trace system, better known by the acronym EGMS, spawned a protracted controversy that played in nearly all centres of power, including Parliament, the Public Procurement Appeals Tribunal and the Court of Appeal.
Integrated Government of Kenya Mark
The centrepiece of what the multi-agency committee is proposing is introduction of something called “Integrated Government of Kenya Mark”. Instead of the current situation where multiple agencies, including KRA and Kebs, are involved in product authentication and issuance of tax stamps, we move to a system where issuance of product authorisation and tax stamps is centralised and run on one platform under the taxman’s EGMS.
To give legal effect to the proposal, the committee has compiled the Integrated Government of Kenya Mark Bill, 2022, to be issued by KRA. Clearly, if the new system is adopted, the playing ground will have shifted. The next contracts will not be as competitive as the ones we have had.
Fighting over contracts
The new regime will have major implications for the tiny elite of international companies forever fighting one another over contracts for printing revenue stamps, production authentication marks and printing of banknotes.
Even before the Bill is passed, there seems to be a push to give KRA an expanded role by putting its EGMS system at the centre of procurement and issuance of all the authentication stamps.
I say so because I’ve seen correspondence where Kebs has written to the National Treasury seeking approval to be allowed to procure its own security imports standardisation mark stamps through a special procurement method called ‘consortium buying’. Under this method, procurement entities with common interests are permitted to procure jointly. And for the first time, Kebs has invited KRA to participate in procuring its own stamps.
I’m of the view that all these proposals by both Kebs and the multi-agency technical working group should now be put in the freezer until after the presidential contest has come to a close. Why are we breaking away from international best practice, where countries have their own standards bodies who issue standards marks to both local and imported products?
Under the protocols and laws of the East African Community (EAC), Kebs is the notified issuer of marks. Indeed, these stamp marks are notified across member states. If we take away this responsibility from Kebs, we must brace for problems with the EAC.
Lucrative exclusive contracts
The way I see it, these are grand machinations and schemes to give incumbent players and contractors lucrative exclusive contracts without having to face competitive bidding. If the so-called consortium buying method is allowed, Kebs will have effectively handed the stamps printing contract to the private parties currently running and managing the EGMS.
And it seems to me that contracts for printing and supply of revenue stamps are very opaque—to the extent that parties have to seek interpretation from lawyers to determine details as rudimentary as the starting date of the contract.
I’ve seen correspondence where KRA was writing to the Attorney-General, saying that the 2015 contract took too long to be effected due to interruptions by a parliamentary inquiry, multiple court cases and the Covid-19 pandemic.
Let’s face it: We are not very good when it comes to negotiation with international contractors. BY DAILY NATION
.jpg)
.jpg)
Post a Comment